Conduct of proceedings – International Commercial Arbitration

There is no fixed rule of procedure for conducting international commercial arbitration. Subject to the provisions of the UNCITRAL Model Law the parties are free to agree on the procedure to be followed by the arbitral tribunal and in their failure to any agreement the arbitral tribunal may conduct the arbitration in such manner as it considers appropriate. In practice, generally, the following procedures are followed:

Read Also: Arbitration and Conciliation – Two sides of the same coin, yet different.

Procedures Followed Under International Commercial Arbitration

(I) Pre-hearing meeting:

Before a hearing of reference to international commercial arbitration, there should be a properly planned pre-hearing meeting or conference which is very fruitful by way of saving time and money at the hearing itself. The international guidelines of the tribunal set out an illustrative list of topics at the pre-hearing meeting:

(a) clarification of the issues presented and the relief sought;

(b) identification of any issues to be considered as preliminary questions;

(c) status of any settlement discussions;

(d) whether any further written statements, including any reply or rejoinder, is requested by the arbitrating parties or required by the arbitral tribunal;

(e) fixing a schedule for submission by each arbitrating party of a summary of the documents or lists of witnesses or other evidence it intends to present ;

(f) fixing a schedule for submission of any documents, exhibits or other evidence which the arbitral tribunal may then require;

(g) whether voluminous and complicated data should be presented through summaries, tabulations, charts, graphs, or extracts in order to save time and costs;

(h) the desirability of appointing an expert by the arbitral tribunal, and if so the expert’s qualifications and term of reference; whether the arbitrating parties intend to present experts, and, if so, the qualification of and the areas of expertise to be covered by any such expert;

(i) determining what documentary evidence will require translation;

(k) other appropriate matters.

(ii) WRITTEN SUBMISSION

When an arbitral tribunal has been appointed, and the procedure to be followed has been established, the first step taken in virtually all international arbitrations is the exchange between the parties of some form of written submissions. Exceptionally, arbitration may proceed without any such documents; but this is only practicable where both the parties and the arbitrators are fully aware of the issues in dispute and are able to evaluate the contentions of each party either by going straight to an oral hearing or by inspection of the subject-matter of the dispute.

(iii) Claims and counter-claims: 

In International Commercial Arbitration if a claimant omits to refer to some claims in his initial written submissions, or fails to identify a dispute with sufficient clarity, he runs the risk of a successful plea by the respondent at a later stage that the arbitral tribunal has no jurisdiction to determine that particular claim or group of claims. The arbitral tribunal may not exercise jurisdiction over a claim which does not come within the scope of the arbitration clause. A difficult question often arises when a respondent attempts to introduce a counter-claim at a very late stage. If the counter-claim does not fall within those terms of reference then, in the absence of agreement between the parties, the arbitral tribunal may not admit it and the respondent will be forced to initiate separate proceedings.

The next function of the written submissions is to identify the facts and arguments in support of the parties’ positions.

(iv) Evidence:

In International Commercial Arbitration the best evidence rule is followed by relying primarily on contemporary documents as the weight of such evidence is very great. Rule  34(1) of the ICSID Rules, entitled “Evidence: General Principles” provides: “The Tribunal shall be the judge of the admissibility of any evidence adduced and of its probative value.” The Arbitral Tribunal shall at all times have complete control over the evidentiary hearing.

(v) Documents:

In International commercial arbitration production of a document is generally the function of the parties who rely on them but the Arbitrators have the authority and jurisdiction to cause documents to be produced which they consider necessary to decide the matter in issue before them.

(vi) Witnesses:

If a party produces a witness, he examines-in-chief and the other party cross-examines unless declined and re-examination on a point raised in cross-examination only. The Arbitral tribunal may also put questions for clarifications if any. The oral stage of the examination or witness should be as short as possible. Another procedure which has gained recognition is to get a written statement of witnesses on whose evidence the party wants to rely. These statements may be in the form of a sworn statement on oath or by an affidavit. Mostly such statements are signed by the witnesses.

(vii) Inspection of subject-matter or site:

An arbitral tribunal has the broad discretion as to the subject-matter in which it proceeds with an inspection of the subject-matter of the dispute. Unless the parties specifically agree otherwise, the arbitral tribunal will normally be careful to ensure that the principle of equality of treatment is strictly observed. The arbitral tribunal will not normally make a site inspection except in the presence of representatives of both the parties and the arbitrators will not normally put questions concerning the case directly to persons working on the site unless the advocates for the parties also have the right to ask additional questions of those persons.

(viii) Experts:

Article 21 of the LCIA Rules, Art. 26 of the UNCITRAL Rules, Art. 6 of the IBA Rules of Evidence and Art. 26 of the UNCITRAL Model Law provide for the appointment of neutral experts by the arbitrators who submit their report to the arbitrators.

(ix) Hearings:

It is the usual practice of international commercial arbitration to have a brief hearing at which “the representatives of the parties have an opportunity to make oral submissions to the arbitral tribunal, and the arbitral tribunal itself is able to ask for clarification of matter contained in the written submissions.”

(x) Awards or decision:

After completion of the arbitral hearing and the arbitral tribunal will make their award or decision.

(xi) Termination of reference:

The arbitral proceedings come to an end after the passing of the final award or decision by the arbitral tribunal which thereafter becomes functus officio.